Willingness to pay for microgrids to enhance community resilience

Chelsea Hotaling, Stephen Bird and Martin Heintzelman ()

Energy Policy, 2021, vol. 154, issue C

Abstract: Given the important role that electricity plays in powering society, and the significant risk that extreme weather and other events pose in disrupting electricity supply, the idea of community-scale microgrids has come to the forefront to enhance electrical grid resiliency and provide critical services to local communities during extended outages. In this paper, a discrete choice experiment is used to evaluate willingness to pay (WTP) for services provided by a community microgrid during extended power outages. With a sample of 939 respondents from New York State, results indicate that, overall, there is a positive willingness to pay for microgrid services, including hospital and emergency services, potable water, shelters, and retail outlets; even if residents are not receiving their own residential electricity supply during an outage. The average willingness to pay for the full suite of evaluated microgrid services is approximately $14 per month per household. We also find that WTP varies with some sociodemographic and other characteristics. These results provide critical evidence for rate-makers and utilities in evaluating societal benefit when making investment decisions for microgrids and related infrastructure.

Keywords: Willingness to pay (WTP); Discrete choice experiment; Mixed logit model; Microgrids; Resilience; Electricity (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:154:y:2021:i:c:s0301421521001178

DOI: 10.1016/j.enpol.2021.112248

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